Oct 16, 2002 — Environmental Power Corp. and Vermont Public Power Supply Authority (VPPSA) have entered into a Memorandum of Understanding (MOU) which outlines key terms and conditions to be included in a more formal agreement covering construction, sale and operation of anaerobic digester/electric generation facilities in New England and New York.

The goal of the MOU is to develop a plan whereby digesters, to be installed by Environmental Power and owned by VPPSA, will extract methane from dairy farm wastes and utilize it to generate renewable, “green” electricity.

VPPSA provides wholesale power to municipal and cooperative electric utilities in New England. Joseph E. Cresci, Chairman and CEO of Environmental Power stated: “This MOU is an important first step in the establishment of a relationship between Environmental Power and VPPSA which will not only benefit the parties themselves but would bring real economic, environmental and energy benefits to the region.

Together, we can improve the economics of regional dairy farms while removing thousands of tons of greenhouse gases from the air and reducing water pollution risk from animal wastes.”

“We look forward to signing a formal sales agreement between Environmental Power and VPPSA and especially to the commencement of facility installations. We are working with numerous farms in the region and hope to be inviting some or all of them to participate in this project.”

“This proposed project is in keeping with our corporate mission of ‘Doing Well By Doing Good’.

It is clear that in the business environment of today, corporations should and will step to the forefront to address a number of society’s problems. In doing so, they will be profitable and society will benefit as well.”

Environmental Power holds the exclusive North American license for a highly efficient anaerobic digestion technology that produces firm, peak power from the methane gas extracted from dairy farm manure.

The company’s technology has been proven through operation on over 25 European farms for the last 15 years. Environmental Power is targeting its proposed anaerobic digestions systems to animal feeding operations in the U.S. with an estimated initial target market of approximately $6.7 billion and estimates initial and expanded market potential to exceed $14 billion.